Retirement Roadmap

Don’t Fall for These 5 Estate Planning Myths

• Mark Fricks • Season 3 • Episode 29

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Do you believe an estate-planning myth? In this episode of Retirement Roadmap, Mark Fricks and Evan Fricks break down the most common misconceptions that cause even “well-prepared” families to face chaos when it matters most. From outdated wills to unfunded trusts and missing powers of attorney, they expose the hidden gaps that can make your plan collapse when your family needs it most.

Drawing from decades of hands-on retirement and estate-planning experience, Mark and Evan explain why estate planning isn’t a one-and-done event or something only the wealthy need. They reveal how fast-changing laws, family structures, and digital assets can render old documents useless—and why routine updates are essential for keeping your plan effective.

You’ll learn:

  • Why every estate plan must be reviewed at least every three years
  • The difference between wills, trusts, and beneficiary coordination
  • How to avoid probate mistakes and unfunded-trust disasters
  • The importance of naming both short- and long-term guardians for minor children
  • Why healthcare directives and powers of attorney are vital for every adult
  • How communication and family meetings prevent conflict and confusion

The truth is simple: an outdated or incomplete estate plan can undo decades of careful saving and create unnecessary taxes, delays, and heartache. With clear planning and open communication, you can give your family the gift of preparation—not a legal mess.

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Advisory services offered through MasterPlan Retirement Consultants, Inc., a Registered Investment Advisor in the state of Georgia. Insurance, tax and commodities services offered through Fricks and Associates, Inc. dba MasterPlan Retirement Consultants. The aforementioned are affiliated companies.

SPEAKER_00:

All matters discussed during this show are for informational purposes only. Each individual's situation may vary, and the opinions expressed here may not apply to everyone. Materials presented are believed to be from reliable sources, and no representations can be made as to its accuracy. All ideas and information should be discussed in detail with one of our qualified representatives prior to implementation. Advisory services offered by Master Plan Retirement Consultants, a registered investment advisor in the state of Georgia. Mark Fricks and Master Plan Retirement Consultants are not affiliated with or endorsed by the Social Security Administration or any other government agency.

SPEAKER_02:

Do you believe an estate planning myth? Hey folks, welcome back and thank you for joining us. Welcome to Retirement Roadmap with Master Plan Retirement Consultants. My name is Evan. With me as always, Retirement Planner Mark Fricks. Today we'll be discussing common estate planning myths and shedding light on the true importance of a complete estate plan. These are not just harmless myths. They can cause your estate plan to fall apart when your family may need it the most. Mark, how often do we see incomplete or non-existent estate plans?

SPEAKER_01:

All the time. Yes, okay. Lifetime for the can. Yeah, they say tax laws are permanent too. So that's right. Yeah, of course that's a myth. And you may have some some numbers or whatever, but um lives change. Um laws change, needs change, families change. Um, you know, clients of ours, we I I go back at every probably every third annual review and just go back and check the documents with them, check the beneficiaries, make sure they're still lined up, what's happened since then. Uh so I I would say at least every three years they need to be re-examined. Uh also, have you added new accounts and maybe you didn't do the beneficiaries correctly? Things like that. There's so many different things that can go on. Uh, we had some major rule changes here in Georgia back in 2018 concerning health care directives or or health care power of attorney and financial power of attorneys. So anything written before then is gonna be tough to use in those situations. And so again, things change nationally, federally, state, the whole thing, and it really just needs to be kept up with the this is the number one reason why even the most expensive estate plans.

SPEAKER_02:

We know once you get into multiple trusts, joint trusts, funding those, you can rack up quite the bill uh with your attorney. But number one reason why even the most expensive plans can fall apart, and just like you said, it needs to be updated with life's changes. Um, some examples would be if you have minor children in the home and then they reach 18 and now they're adults. Now they need some POAs, frankly. They need healthcare directives, things like that. Um more than once, and r pretty regularly I see people coming in with wills. And yeah, this was last updated when my kids were children, and now they have children. So um, yeah, divorce is a huge one. Um if you have mixed families, um multi multiple families coming together, definitely anyone.

SPEAKER_01:

Like a son or daughter divorce, um, uh had more children or had children for the first time, any life-changing event for sure, uh, but even things you may not see or or know because again, it may be a law change. Uh, you know, digital assets are a big thing now. You know, any paperwork that's very old, they don't address things like you know, logins for accounts and and things of that nature. And and that's that's not an automatic. And I know in many states, people I've taught I've spoken with that are associated with probate courts are telling us that uh it is getting harder and harder to get a will approved in those states. If it's of any age, if there's any kind of an error, if there's a misspelled name, an address, a missing address, something was thrown out. We we saw that recently, a missing address, and uh they've had to uh hire an attorney um to go through and fight the court on this, and otherwise it it's it would be like they passed away without a will. So now the court decides where everything goes, which is a good reason to have a will in the first place, of course. But and don't, you know, I've had people tell me, well, I I hand wrote a will. Hundred years ago that may have worked. Fifty years ago, maybe. Please don't sit down and handwrite a will, sign it, and have your neighbor sign next to it or whatever. That is that is that's not gonna work, okay? I'm not a probate judge, but I can tell you that's not gonna work. But just things like that that need to be uh addressed. And and like we had a show, an episode um a few months ago, maybe a year ago now, um, and you'll have to tell me the title about not leaving a mess. What was the uh The Gift of Preparation, yeah. Yeah, so this is kind of part of that as well, but um really focusing in on these five areas where people really misunderstand.

SPEAKER_02:

Another good point and major life changes, but something else to consider as well is the proximity of your powers of attorney. If you have someone on your health care directive who lives states away or is not available, and or even you know, a lot of people might choose someone that's their age, and as they get older, that person might be less available, depending on health or even life, uh things like that. So making sure the powers of attorney can act.

SPEAKER_01:

And speaking of proximity, don't put these items in a safety deposit box at the bank. Most accidents occur on the weekend, and so these documents are for the living. So your financial power of attorney is so someone can make financial transactions if you are uh are unable to. More importantly, the health care directive or uh health care power of attorney, somebody can make health care decision decisions for you. That is not an automatic for a spouse, by the way, so be careful with that. Um but if they're locked away in the safety deposit box, yeah, yeah, you know you're you're you're out of luck until Monday, I guess. But um keep them in a safe place at home, maybe have some copies for some folks that are on those documents, things like that. And we may go into this more in a in just a minute, but since that came up and popped into my mind, I thought it'd be important to mention that.

SPEAKER_02:

Uh well, myth number two estate planning is only for the elderly or super rich. We know that that's not true. It's not just about who gets your stuff or a tool for the rich to minimize tax liabilities. In fact, there are a lot of can there's a lot of confusion about trusts and how that actually is helping your tax uh efficiency. But it really is it's the same as we discussed before. It's the gift of preparation, it's making things as easy as possible for your loved ones if something unexpected happens to you.

SPEAKER_01:

We have spoken to so many folks that um have been an executor or an executrix of of an estate, and even when it's fairly well done, it is a huge headache. If there's anything that's not put together correctly, some of the things we've already mentioned, it is a headache. And it's a year, 18-month, two-year process if it's not done correctly. You don't want to leave that on somebody. I mean, if you if you've named somebody your representative or your executor, that must mean you trust them and care about them. You don't want to leave them a problem. Uh so absolutely, that's that's a we've seen it. That's all I can say. We've seen it.

SPEAKER_02:

And at the very least, power of attorney, health care directive, living will to ensure your healthcare wishes are known. Uh a lot of people think, oh, estate planning that just means trust and wills, but no, no, we want to make sure that your health wishes are known, your medical desires on what happens end of life. Um, if someone needs to make medical or financial decisions for you, you also don't want to leave them having no idea what you would prefer.

SPEAKER_01:

Um, and you mentioned earlier this this is a little bit associated with what you said earlier. I've got a friend that uh has a daughter that's in college. Uh I don't think she owns anything. The daughter um might have a car, but it maybe maybe in her mom's name, okay. But I insisted that they get a health care power of attorney. Yeah. Because God forbid she's in an accident on the way back from school or something. You want to be able to step in without any kind of a court interference or any kind of a even a doubt and be able to help that child, you know, authorize searcher or whatever. So, and by the way, in Georgia, the health care directive, there is no charge for that. It is online. Make sure you go to the Georgia website, but it is a uh document that matches the state laws uh written by the state legislator, uh legislation someone over there might need a backup on that. Uh the people in charge in Georgia um wrote that specifically to match the laws. So uh that document is available. So worst case, if you've got uh kids over 18, at least print that off and get that filled out. Yeah.

SPEAKER_02:

And some other really important considerations, minor children. You want to ensure that they're raised by the people you want if something were to happen to you. And this is something that uh popped into my that I discovered in researching this topic uh for myself that hadn't really thought about non-traditional relationships, people who may not be married. Um, but they the estate planning preserves your loved ones' rights to inherit or get involved in a medical emergency.

SPEAKER_01:

At least make those decisions because if you're you know, if you're uh living with someone but you got married, there are not too many legal rights there. But yeah, that person cares about you, obviously, so you want to give them some rights as well.

SPEAKER_02:

Yeah, blended families, children of different marriages, it can get so messy, and again, this is um saves not only headache, um, provides you with peace of mind, but you are providing peace in this time for your loved ones instead of having to scramble.

SPEAKER_01:

Especially when there's so much other stuff going on at that time. And and that's one of the reasons when we uh work with a client, instead of just sending them to one of our attorneys, we first meet with them and fill out an estate planning workbook that kind of explains all this, it kind of guides them through the thinking process so that they uh can be more clear about what their wishes are. Sometimes it takes two or three meetings to fill out that workbook because they come across something. Oh, I had not thought about that. What if one of my kids passes away before I do? Where does their stuff go? What if all these what if scenarios, and it can get complicated, especially like you said, in second marriages and blended families and things of that nature. So our guidance in that regard, I think is very important. We already understand the financial side, so we can kind of bring that into the decision-making side, and I it just make it so uh so much more clear. Uh there's some great estate planning attorneys out there. Sometimes they're more about creating the documents than really finding out the wishes. I'm not saying that's not a blanket statement, I'm just saying um I think us working as a liaison between the client and the attorney, we can really deliver the message because by this time we've got to know the client pretty well and their family dynamics, things of that nature. So uh again, I think that's a valuable service that that we bring to the table.

SPEAKER_02:

Yeah, well, masterplanretire.com, perfect segue. You can go to our website, masterplanretire.com, and uh there is a schedule now button that takes you directly to our calendar. Find a time that works best for you. Uh, we'd love to meet in person, buy you a cup of coffee in the office. But uh a few years back, along with the rest of the world, we got really good at Zoom. So we're happy to do that as well. You can also call us at the office 770-980-9262.

SPEAKER_01:

And that's schedule a meeting button. Um, first of all, it typically we will sit down and run a series of reports for uh for folks. This is complimentary. But even if it's just, hey, I need some estate planning done, we'll be glad to take you through that process and and and just get you through that. And that's not uh, and by the way, because of the attorneys we work with um tend to be less expensive than just going on the street. I'm not gonna say that you know it's it's half the price or whatever, but because we are doing a lot of the planning work, uh, they are not only expert estate planning attorneys, but uh they are not the most expensive out there as well because of the work we do. But so whatever reason you want to meet, whether it be again to talk about the subject today, to talk about your overall retirement planning and where you're at, um schedule that complimentary meeting. I think you will be very glad you did.

SPEAKER_02:

Yeah, absolutely. Uh myth three having a trust guarantees your family will stay out of probate court.

SPEAKER_01:

I have seen some wonderful trusts, beautiful bound uh leather, uh really thick paper, uh a nice font, worthless because they weren't properly funded. Um I I met a guy one time, this has been 15 years ago, he said he paid$10,000 for his trust. Now let me tell you right now, that's about four times too much, okay? But secondly, it had never been funded. So it was just the most expensive book, unless you bought like a an original edition of the Bible or something. The original. Oh, so looking for that one, yeah. Or the Ten Commandments or whatever. But but seriously, I mean, we were like, we've got to get this done. And it had been two or three years since uh and that's what that's the that's sometimes the problem when you go to an estate planning attorney. So unless you pay them extra money, they basically hand you a set of instructions. Here's how you find your trust. And two reasons why I wouldn't want to do that. Number one is mistakes. Number two is a lot of times we just don't get around to doing that.

SPEAKER_02:

Okay, so and depending on the complications of the trust and and your estate and what you need, funding is not always a walk in the park either. No, not at all, not at all. So uh again, just um uh something else to be careful with. But it's true, a trust does not go through probate, it avoids probate. That's one of the powerful uh attributes of a trust, but it's if you do it correctly, needs to be properly titled, assets need to be properly titled, uh, beneficiaries need to make sure they align with your state docs. Um because also if you don't change your beneficiaries, um, depending on what your plan is and what your need is, the beneficiary on that account will take precedent over whatever the trust says. So they need to you need to make sure that they align. Um incomplete or inadequate funding of a trust can basically make it as though you had no trust at all.

SPEAKER_01:

Exactly. And again, that's part of the role we play is making sure that gets done. Uh we handle what we can handle, we give assignments on what the client needs to handle, and then we follow up. Did you do this? As can I update this? Can I see a copy of what you did to really make sure, not because I don't trust the client, but make sure it was done correctly if it's something they had to do. Again, I I I want it perfectly lined up. You know, the stories we get when it's done correctly are such a blessing because they said, you know, there was nothing to it. Uh we were able to agree, we were able to follow the process, um, we avoided uh maybe some taxes, we we avoided probate costs, which are climbing, rising as we speak. Um so just very important, a trust is great, and we're talking about a living revocable trust at this moment, by the way. Um, but uh well written but also properly funded and set up to match the family situation. What if what if it is a second marriage? Maybe you don't want a joint trust, maybe you want two single trusts to make sure that you know maybe each other's taken care of, but you want to make sure your kids don't get disinherited if the other one gets remarried or dies first or you die first or whatever. So again, it's a lot of things to think through, but that's what we do. Yeah, absolutely.

SPEAKER_02:

Um myth number four. Now, this one caught me with a couple of holes in my estate plan. Um myth number four: social services will never take custody of your kids if you have guardians named. So even if long-term guardians are named. That's the myth. That's the myth. Okay. Even if long-term guardians are named, there could be instances where social services may be forced to take temporary custody of your kids. If your legal guardians are not immediately available in another state, traveling, unable to be reached, whatever, authorities have may have no choice but to place your children with social services until legal guardians arrive.

SPEAKER_01:

That is something new to me. I didn't know that either. I've not maybe we need to add that to our workbook, but I can think, you know, maybe let's say the grandparents are the first guardians, and God forbid this couple uh they're in a car wreck and and and they they pass away. These grandparents live four states away. Um, yeah, they social services will have to take those kids into custody. Um, so maybe a neighbor. Yeah. You know, they can step right in or something like that. I I again I had not thought about that either, but that's uh that's that's a big deal.

SPEAKER_02:

Well, how do you avoid this problem? It's as simple as having short-term legal guardians named in addition to your long-term guardians who are authorized to legally care for your kids until the long-term guardians arrive.

SPEAKER_01:

Yeah, it's important. Again, that's something we need to think about and and discuss and maybe insert as part of our planning. Yeah, absolutely.

SPEAKER_02:

Um, myth number five, the fifth and final myth. You don't need to tell anybody about your estate plan. It's better to keep these things private.

SPEAKER_01:

Sounds like a much older generation. We do, seriously, seriously. A lot of our uh older clients are are very private from their kids and grandkids about their finances. Um I've seen instances where finally they they do open up, but uh folks, and again, I'm not trying to be uh to generalize here, okay? But many times people in their 80s and 90s were raised to be private. You didn't discuss your finances, you didn't tell your neighbor how much you made, or maybe even you know your kids certainly, or whatever. Um, but this is important again that they know where things are. Uh have a family meeting. I think we talked about this uh recently in an episode about uh sitting down with the family, maybe even with us as their advisor, and and sharing what they want us to share about this is how this is set up, this is how things are flowing, this is where the documents are, this is you know, all that all that uh information that's important. Again, we never know when when something may happen. Uh so many times, Evan, as you know, we'll get a phone call uh first thing in the morning. You know, my husband passed away last night, what I do next. And it was sudden, it was, you know, they were not expecting it. And and so that that happens, and and uh I think having that information, and I'm not saying you tell your kids or your beneficiaries you know your deepest, darkest financial secrets, but there needs to be some level of understanding of where things are and how things are going to work uh from that standpoint and and prepare them for uh uh for an inheritance as well. And and maybe, hey, how to handle this. This this is our feelings about how we want you to handle that, and you know, maybe continue working with master plan for a few years to to make sure this flows easily and simply and and reduce again, reduce taxes, help guide through probate. And and by the way, even with a trust, there can be things that slip through the cracks that have to go through probate, but uh we want to be very careful with that. That's why you have what's called a pour-over will, right? So you still have a will with a trust, but it catches those things that might slip through the cracks. The example I always give is I I run down to the Harley Davidson store and buy me a motorcycle, and on the way back home I crash into an 18-wheeler and die, right? I forgot to put it in the name of the trust when I bought it, I just put it in my name. Well, that can't go through the trust, but the pour of a wheel says pour it in the trust. But on the way to the trust, it does have to go through probate, but at least it's very minimal what has to go through there. But you always try to be careful. We had a recent example of uh uh the trust was as as tight as it could be, and and there were just a couple of shares of Macy's stock that the guy said, Oh, I'm selling that, I'm selling that. Every time we met, I'm selling that. Well, guess what? He passed away.$2,000 worth of Macy stock. He had to pay five thousand, no, it wasn't five thousand, three or four thousand dollars for probate to get that Macy stock probated for his um. And it took at least six months. It was a while. Yeah, it was a while. And and and and then they had an old trust, and I don't want to tell a bunch of old war stories here, but an older trust that the grandmother had set up that made it more difficult for her son who then passed away, that was the spouse, to make so that was another issue as well.

SPEAKER_02:

And and so just um That was a prime example of what of reviewing your estate documents. That trust was written like uh I I feel like the attorney wanted to be a columnist in his second career or something, and the cover letter was almost like uh uh there were jokes he put in it.

SPEAKER_01:

Editorial It was columns crazy it was very interesting. It was crazy. Uh and at least it wasn't boring. No, and it was again was it a proper estate planning attorney? Probably written, I think it was written in the 60s, you know, so it's been around for a while. But anyway, just uh another one of those things that need to be reviewed. Is this going to work? Things of that nature. You don't want to wait till after the fact to find out where the holes are. Yeah.

SPEAKER_02:

Yeah. I mean, have you ever seen um a movie where the family is going crazy trying to find a copy of the loved one's will after they passed? It seems like it's in a lot of movies. People like digging up things, trying to figure out who does what, everyone's fighting, there's one crazy aunt that comes out of nowhere, or uncle. Yeah, these things happen far too often because people are afraid either, afraid to talk to their loved ones. It isn't always a pleasant subject, um, but they're hard, it's hard to discuss end-of-life, which is sometimes it's personal and sad. Um, but you've got to discuss those estate plans that you have in place. If you don't let your family know what documents you have or even where to find them, there's a that's in bold. Make sure they know where your documents are. Um, they may be forced to spend a lot of unnecessary time, money working with lawyers. Um that takes a lot to sort out of an estate. Even when you have a loctite plan, if no one knows about it, it's it's still gonna you have to drag your feet and get go through some.

SPEAKER_01:

If you can't find them, it's as if you don't have them. And and so I I know our attorneys keep a an original copy as well, but I had a situation recently where um this was way before they came to to work with us, um, the attorney that did their paperwork had had um retired. Yeah. And they couldn't find him, didn't know where the documents were, they couldn't find their set of documents, might as well not have documents at that point. So again, just making sure that it's understood where that is. Again, you can go and go down to Home Depot or Sounds or wherever, buy a nice fireproof lockbox, make sure you got a couple of people with keys or they're hanging in a certain spot or whatever. It's as simple as that uh to make sure you're and again make sure that anybody in the documents knows where they are.

SPEAKER_02:

Yeah, I mean take time to have an open, direct, honest communication with your loved ones, talk to your family in advance, order a pizza, do a fun family night game or whatever. Do it in advance. Cut out the chaos, the fighting, the misunderstanding if the unthinkable when the unthinkable happens. Um and you know, there these are the five myths for today. We have uh a bunch of estate planning episodes uh on YouTube and the podcast platform and everything else. Um we even have one where we interview an attorney, uh, a couple actually. Um there are so many gotchas we could get into war stories. You've shared several today. Um I don't it's hard to even say where to begin because you want to tell everyone, oh, this is we've seen this before. Well, check look out for this, we've seen this before, we've seen this before. But it's so important. Um masterplanretire.com. Go to our calendar, schedule a time with us. Um, we will discuss your retirement, 10,000-foot view of where you stand now. We'll stress test it. Um, all that is completely complimentary. Um, whether you become a client or not, we'll run those reports and give you uh an idea of where you stand in your retirement preparation, uh, strengths and weaknesses, things that need help. But yeah, estate and legacy planning is so important. It's why in our planning process, it is the final thing we do once we've created the plan, um, moved anything we've needed to move, check out tax strategy, everything that we do, the very icing on top, which is really um what holds it all together, is the estate plan.

SPEAKER_01:

It really is, and and it connects with everything you do financially. So you can't just say um, you know, this this has nothing to do with that, it does affect it. So thanks for joining us today. We uh glad you joined us. Uh, but until we see each other again, remember land well and prosper.

unknown:

Take care.